The Trump administration has launched a Medicaid crackdown targeting more than $1 billion in federal funds it says were improperly used by Democrat-led states to provide healthcare for illegal immigrants, including some with violent criminal records. The Centers for Medicare and Medicaid Services (CMS) said California, Illinois, Washington, D.C., Washington, Colorado, and Oregon collectively misspent $1,351,204,127 in federal Medicaid dollars between 2024 and 2025.
CMS officials said federal law prohibits Medicaid funds from being used for illegal immigrants, except for emergency medical treatment. However, the agency found that several blue states used complex accounting methods to extend broader health coverage. “Protecting Medicaid from waste, fraud and abuse isn’t optional. It’s the law. Every dollar misspent on illegal healthcare spending is a dollar taken from vulnerable Americans,” CMS spokesperson Emily Hilliard said. She added that “the Trump administration won’t tolerate it. CMS is auditing aggressively, recovering every dollar and holding states accountable.”
California was the largest violator, with over $1 billion in federal Medicaid money allegedly used for illegal immigrant healthcare. Illinois followed with nearly $30 million, and Oregon with $5.5 million. Gov. Gavin Newsom’s office denied the findings, calling Republican claims “false.”
Public policy expert Chris Pope of the Manhattan Institute said states are manipulating federal provisions. “Medicaid is by far the largest source of federal funding for states… states have figured out how to game the system,” Pope said.
Acting CDC Director Jim O’Neill highlighted that some funds even benefited violent offenders. His “MorningMedicaidMugshot” campaign spotlighted cases including a convicted killer and a child sex offender receiving taxpayer-funded medical care.
